RTD Alcoholic Beverages: Incl Impact of COVID-19 - US - December 2020

OVERVIEW
What you need to know
Key issues covered in this Report
Definition
COVID-19: Market context
Economic and other assumptions
EXECUTIVE SUMMARY 
Top takeaways
Market overview
Figure 1: Total US volume sales and forecast of flavored malt beverages, 2015-23
Figure 2: Total US volume sales and forecast of spirits-based prepared cocktails, 2015-23
Figure 3: Total US volume sales and forecast of wine coolers, 2015-23
Impact of COVID-19 on RTD alcoholic beverages
Figure 4: Short-, medium- and long-term impact of COVID-19 on RTD alcoholic beverages, December 2020
Opportunities and challenges
Reemergence
Figure 5: Perception of RTD alcoholic beverages launches versus all alcohol launches, January 2019-November 2020
Pandemic habit changes point to opportunities for RTDs
Figure 6: Reasons for drinking less alcohol, July 2020
Drinkers want to make “healthy” choices
Figure 7: Alcohol statements – Health – Any agree, by alcohol type consumed – Any drink, September 2020
Recovery
Figure 8: Top three RTD alcoholic beverages launches perceived as healthy, January 2019-November 2020
RTDs can be the playground for functional alcohol
Figure 9: RTD alcoholic beverage consumption – Any drink, 2018-20
RTD drinkers are becoming more discerning
Figure 10: Important factors in RTD Alcoholic beverage choice, September 2018 and September 2020
THE MARKET – KEY TAKEAWAYS
FMBs drive category sales and growth
RTDs avoid flight seen in other alcohol categories
RTDs spared from on-premise declines, challenged by physical distance
A focus on quality can attract and retain consumers
Category should prepare for return to on-premise drinking
MARKET SIZE AND FORECAST
Volume sales of FMBs projected to double from 2020-23
Figure 11: Total US volume sales and forecast of flavored malt beverages, 2015-23
Figure 12: Total US volume sales and forecast of flavored malt beverages, 2015-23
Prepared spirits-based cocktails continue their steady climb
Figure 13: Total US volume sales and forecast of spirits-based prepared cocktails, 2015-23
Figure 14: Total US volume sales and forecast of spirits-based prepared cocktails, 2015-23
Wine cooler declines slowing
Figure 15: Total US volume sales and forecast of wine coolers, 2015-23
Figure 16: Total US volume sales and forecast of wine coolers, 2015-23
Figure 17: RTD alcoholic beverage launches, by launch type, December 2019-November 2020
MARKET FACTORS 
RTDs immune to alcohol declines, for now
Figure 18: Alcohol consumption, 2017-20
RTDs outperform all alcohol launches; can secure value by proving worth
Figure 19: Perception of RTD alcoholic beverages launches versus all alcohol launches, January 2019-November 2020
Figure 20: Expected US unemployment, 2019-25
Figure 21: Impact of COVID-19 on alcohol consumption, by HH income, July 2020
Quest for health continues, drinkers want to feel good about their choices
Figure 22: Alcohol statements – Health – Any agree, by alcohol type consumed – Any drink, September 2020
Youngest drinkers exhibit strongest flight; engage through experience
Figure 23: Change in instance of alcohol consumption, 2017-20
The expansion of cannabis legalization challenges alcohol
Figure 24: Substances consumed or used – Marijuana/cannabis (any format), October 2019
Pandemic-related stress boosted drinking among some
Figure 25: Impact of COVID-19 on alcohol consumption, July 2020
Figure 26: Reasons for drinking more alcohol, July 2020
RTDs can provide a much-needed mood boost during tough times
Figure 27: Alcohol motivations, by RTD alcoholic beverages consumption, July 2020
RTDs can find opportunity in pandemic habit changes
Figure 28: Reasons for drinking less alcohol, July 2020
COVID-19 increased drinking alone, on weeknights and via delivery
Figure 29: Impact of COVID-19 on alcohol behavior, by RTD alcoholic beverages drinkers, July 2020
MARKET OPPORTUNITIES 
The category is in need of community
Figure 30: Alcohol statements – Alcohol – Any agree, by alcohol type consumed – Any drink, September 2020
RTDs can be the playground for functional alcohol
Nurture exploration and loyalty through delivery and subscriptions
Figure 31: Alcohol purchase location, by RTD alcoholic beverages consumption, July 2020
Be ready to strike on-prem
COMPANIES AND BRANDS – KEY TAKEAWAYS 
Large brands caught flat-footed in the seltzer craze find their ground
Lows and nos may not equate to BFY
Flavor innovation moving in the right direction
COMPETITIVE STRATEGIES
Big brands continue to play catch-up, each brings its own twist
Figure 32: Corona Hard Seltzer Glass, December 7, 2020
Figure 33: The Sacrifice, October 6, 2020
Figure 34: Top three RTD alcoholic beverages launches perceived as quality, January 2019-November 2020
Figure 35: Top three RTD alcoholic beverages launches perceived as premium, January 2019-November 2020
Seltzer drinkers support small brands
Figure 36: Alcohol statements – Brand – Any agree, by alcohol type consumed – Any drink, September 2020
Seltzer brands go hard
Leading lime gives way to wider array of flavors
Figure 37: RTD alcoholic beverage launches, by leading flavors, 2018-20*
Figure 38: RTD alcoholic beverage launches, by fastest growing flavors, 2018-20*
Figure 39: Interest in alcoholic beverage flavors – Any interest (net), May 2020
Flavor variety contributes to perception of tasty
Figure 40: Top three RTD alcoholic beverages launches perceived as tasty, January 2019-November 2020
Health-focused flavors and organic positioning boost health perception
Figure 41: Top three RTD alcoholic beverages launches perceived as healthy, January 2019-November 2020
Seltzers excel at natural perception
Figure 42: Top three RTD alcoholic beverages launches perceived as natural, January 2019-November 2020
It doesn’t need to be a race to the bottom, but you have to show effort
Figure 43: RTD alcoholic beverage launches, by average calories, 2018-20*
Figure 44: RTD alcoholic beverage launches, by average sugar, 2018-20*
Figure 45: RTD alcoholic beverage launches, by leading claims, 2018-20*
Seasonality can extend RTD relevance throughout the year
Cans continue to grow share, underperform bottles on taste perception
Figure 46: Perception of canned RTD alcoholic beverages launches versus bottled RTD alcoholic beverages launches, January 2019-November 2020
Figure 47: RTD alcoholic beverage launches, by pack type, 2018-20*
THE CONSUMER – KEY TAKEAWAYS  
RTDs increase penetration, led by growth in seltzer consumption
Flavor innovation key to category success
Convenience is a strong draw, health gaining importance
Social nature of RTDs requires creativity during health pandemic
Health serves as more of a barrier than a draw
RTD ALCOHOLIC BEVERAGE CONSUMPTION
Seltzers drive RTD consumption increase; tea predictions are coming true 
Figure 48: RTD alcoholic beverage consumption – Any drink, 2018-20
Wine-based drinks find strongest appeal among women, gaining men
Figure 49: RTD alcoholic beverage consumption – Any drink, by gender, September 2020
Nearly three quarters of 25-34s drink RTDs, consumer base getting older
Figure 50: RTD alcoholic beverage consumption – Any drink, by age, September 2020
Quality boost could retain younger drinkers
Figure 51: Change in share of RTD alcoholic beverage consumption – Any drink, by age, September 2019-September 2020
Seltzer consumption skews toward higher earners; important to prove worth
Figure 52: Share of RTD alcoholic beverage consumption – Any drink, by HH income, September 2020
Sparkling wine and white spirits are stronger competitive targets than beer 
Figure 53: RTD alcoholic beverage consumption – Any drink, by alcohol type consumed – Any drink, September 2020
CHANGE IN RTD ALCOHOLIC BEVERAGE CONSUMPTION
35% of RTD drinkers have increased consumption in the past year
Figure 54: Change in RTD alcoholic beverage consumption, September 2020
The category boosts engagement among men
Figure 55: Change in RTD alcoholic beverage consumption, by gender, September 2020
RTDs gain strength among 35-44s
Figure 56: Change in RTD alcoholic beverage consumption, by age, September 2020
Flavor innovation has driven consumption increase
Figure 57: Reasons for drinking more RTD alcoholic beverages, September 2020
Sugar vigilance is one means of preventing flight, but more can be done
Figure 58: Reasons for drinking fewer RTD alcoholic beverages, September 2020
REASONS FOR CHOOSING RTD ALCOHOLIC BEVERAGES
Health lags behind reasons for choosing RTDs, but grows importance
Figure 59: Reasons for choosing RTD Alcoholic beverages, September 2020
Figure 60: Reasons for choosing RTD Alcoholic beverages, September 2018 and September 2020
Portability wins seltzer drinkers
Figure 61: Reasons for choosing RTD Alcoholic beverages, by alcohol type consumed – Any drink, September 2020
Women are drawn to convenience, men like RTDs for what they are
Figure 62: Reasons for choosing RTD Alcoholic beverages, by gender, September 2020
Occasional convenience has best chance of gaining older drinkers
Figure 63: Reasons for choosing RTD Alcoholic beverages, by age, September 2020
RTD ALCOHOLIC BEVERAGE CONSUMPTION OCCASIONS
Brands need to improve small scale and solo RTD occasions
Figure 64: Correspondence analysis – Symmetrical map – Alcohol consumption by occasion, September 2020
Figure 65: Alcohol consumption by occasion, September 2020
RTD consumption is a social occasion for women
Figure 66: Alcohol consumption by occasion – Any RTD*, by gender, September 2020
IMPORTANT FACTORS IN RTD ALCOHOLIC BEVERAGE CHOICE
Flavor plays an outsized role for RTD drinkers
Figure 67: Alcohol statements – Choice – Any agree, by alcohol type consumed – Any drink, September 2020
RTD drinkers are becoming more discerning
Figure 68: Important factors in RTD Alcoholic beverage choice, September 2020
Figure 69: Important factors in RTD alcoholic beverage choice, September 2018 and September 2020
Flavor is key for women
Figure 70: Important factors in RTD alcoholic beverage choice, by gender, September 2020
22-34s are just as likely to be looking at total calories as they are brand
Figure 71: Important factors in RTD Alcoholic beverage choice, by age, September 2020
Low calories outweighs low price among seltzers drinkers
Figure 72: Important factors in RTD Alcoholic beverage choice, by alcohol type consumed – Any drink, September 2020
BARRIERS TO RTD ALCOHOLIC BEVERAGE CONSUMPTION
Sugar and quality control can boost engagement
Figure 73: Barriers to RTD alcoholic beverage consumption, September 2020
Figure 74: Barriers to RTD alcoholic beverage consumption, by RTD alcoholic beverage consumption, September 2020
Health improvements will engage reliable drinkers, with spillover benefits
Figure 75: Barriers to RTD alcoholic beverage consumption, by age, September 2020
Men are less likely to see themselves in the category
Figure 76: Barriers to RTD alcoholic beverage consumption, by gender, September 2020
APPENDIX – DATA SOURCES AND ABBREVIATIONS
Data sources
Sales data
Consumer survey data
Correspondence analysis methodology
Abbreviations and terms
Abbreviations
APPENDIX – COMPANIES AND BRANDS
Figure 77: Multi-outlet sales of beer (including flavored malt beverages)*, by leading companies and brands, rolling 52 weeks 2019 and 2020
Figure 78: Multi-outlet sales of premixed cocktails/coolers, by leading companies and brands, rolling 52 weeks 2019 and 2020